BOUND BY LEASE
Ben Eoin sale will involve just the land, not marina components.
The official overseeing the sale of surplus federal lands in Cape Breton confirms anyone who purchases the Ben Eoin Marina property will be required to honour the existing 50-year lease that the marina has for the land.
As the Cape Breton Post reported this week, Public Works and Government Services Canada has placed for sale the seven-hectare property on which the marina’s yacht club sits.
The ground lease that the marina executed with the former Enterprise Cape Breton Corp. was for a 50-year term, with an option to renew for another 50 years, at a rent of a dollar a year. That is a covenant by which any new owner of the property will have to abide.
“(It) goes with the property and it’s to be attached to the property during any sale so they are covered certainly for the entirety of their lease and their lease is on all of the land, not a portion of the land,” said Gerard Shaw, regional director of Cape Breton operations with PWGSC.
When asked if he anticipates much interest in the property, given the restrictions that come with ownership, Shaw acknowledged he can’t predict the future.
“We’ve had limited interest
at this point, we’ve had some, but limited interest,” he said. “We won’t know until August 1 how many people will actually submit a proposal … I can’t answer why anyone would want to buy it with all of that attached to it.”
Shaw said they have met with the marina board and informed them of the process that would be followed to tender the property, why the land has been placed for sale and also the timing of the sale.
“We’re doing it under the auspices of Treasury Board policy and federal government policy about how we dispose of and why we have to dispose of them,” he said.
“We have our disposal strategy in place, we’re looking at all of the lands that are declared surplus and we’re listing as many as we can for sale to support our strategic disposal plan.”
Shaw said he expects the marina will submit a proposal for the land, although it hasn’t indicated that definitively yet. He added they will evaluate any proposals they do receive.
Offers close on Aug. 1. The sale will involve the land only and not the marina components.
The lease dates back to 2011. At the 20-year mark of the agreement, the marina also has a one-time opportunity to
purchase the property.
The assessed value of the property, located at 4964 East Bay Highway, is currently $813,300.
The tender document itself is 145 pages and includes the ground lease Enterprise Cape Breton Corp. executed with the marina.
The advertisement noted that the highest or any offer will not necessarily be accepted.
The acceptance of an offer to purchase is expected within 15 days of the tender close.
The closing date is expected to be within 60 days of the acceptance of an offer.
The tender document noted the site has been cleared and developed for use as a marina.
The premises are only to be used as a marina, as defined in the lease agreement.
ECBC granted the proponents of the Ben Eoin development $4 million to construct the marina, a project that has been valued at $4.8 million. The funding was publicly announced in late 2012, after much of the construction had already taken place.
Overall, PWGSC is about where it expected to be in the process of divesting surplus properties in Cape Breton, Shaw said, including the sale earlier this year of Aerie Estates subdivision in Ben Eoin and the Maplewood subdivision in Glace Bay, as well as several other properties.
Encroachments will be the biggest challenge in the sales, Shaw said. Work is also continuing on the issue of “honey lanes.” Years ago, honey lanes — narrow strips of land behind properties about 10-20 feet in width — were used to allow access so outhouses could be emptied. Those lands remain a part of the federal portfolio. In some cases, where homes were built back-to-back, the honey lanes go down the middle of those properties. Because no one anticipated those narrow lanes ever being used for another purpose, after the honey lanes closed, homeowners built structures like sheds and garages on them.
The entire sales process is expected to take at least five years.